CompTel added Dominican Republic to 14 other countries (CD Jan 10 p7) that it said didn’t comply with World Trade Organization (WTO) requirements. In reply comments filed with U.S. Trade Representative (USTR), CompTel said Dominican Republic regulator Indotel had mandated 50% increase in fixed rates for all inbound international traffic terminating with all carriers in country. It said increased charge wasn’t justified by any increased costs for terminating inbound international calls. Resolution said increased rates were necessary to address country’s concern with purported reduction in foreign currency, which was affecting national balance of payment. However, CompTel said resolution was specifically targeting inbound international telecom services, without imposing same surcharges on any other services, which violated WTO requirements.
China continues to impose “major” barriers to U.S. carriers that interfere with their ability to compete in China’s telecom market, U.S. Council for International Business (USCIB) said in comments to U.S. Trade Representative (USTR). USCIB Pres. Thomas Niles urged USTR to work closely with China to create regulatory body separate from any basic telecom supplier: “Given that the Chinese government owns and controls all of the major operators in the telecommunications industry, it is impossible for China to establish a regulator that is truly independent.” USCIB said China’s “overly narrow” interpretation of market access opportunities for foreign carriers and lack of independent regulator had “negatively impacted market opportunities for U.S. telecommunications companies contrary to China’s WTO commitments.” USCIB said countries such as Canada, France, Germany, Japan and Mexico also imposed barriers to U.S. carriers violating their WTO obligations. It said Canadian Radio-TV & Telecom Commission (CRTC) failed to ensure that independent ISPs have access to cable networks on reasonable terms and conditions that would drive them from market, allowing dominant cable operators to preserve their dominant position preventing fair competition. European Union (EU) enforcement of its rules regarding telecom services has been “far from uniform” that negatively affects investment through this area, USCIB said. It said EU demonstrated its inability to secure compliance in long term. It said while some member states had been taken to European Court for failure to implement those rules, that process could take up to 4 years. Those problems are particularly evident in France, Belgium and Germany, USCIB said. It said with exception of U.K. and Ireland, there was no effective regime in place to ensure WTO obligations on cost orientated pricing for interconnection and nondiscrimination could be met. USCIB said USTR should monitor very closely any progress within EU and “maintain appropriate pressure” on its national authorities. Germany also clearly violates its WTO compliance, USCIB said. It said RegTP was incapable of enforcing its rulings in timely and effective manner. It said German regulator lacked basic tools, such as ability to impose fines for violations of its orders. Moreover, it said, German law doesn’t give competitors opportunity to examine evidence presented by Deutsche Telekom (DT) to RegTP to justify telecom rates. USCIB said RegTP should be granted statutory authority to implement and enforce Germany’s trade commitments. It also said German courts should have statutory authority to hear appeals in timely manner and to enforce country’s trade commitments. USCIB said Mexico failed to implement its WTO obligations, which “if fully implemented, would allow effective competition to flourish.”
U.S. telecom policies shouldn’t be model for international free trade negotiations in telecom sector, new report by Cato Institute said. It said Telecom Act of 1996 was “flawed model” for adoption in foreign telecom markets, especially in Japan. It said U.S. Trade Representative (USTR) was pushing other countries to adopt similar policies, which “too often rely on heavy-handed regulation and innovation-stifling rules.” Study said interconnection and line-sharing mandates introduced by Telecom Act harmed domestic telecom market by retarding network investment and innovation. It also ignored emerging wireless and Internet- based telephony technologies “that may replace the older wireline telephone networks in the near future,” study said. It said USTR’s continued push to force foreign countries to adopt U.S.’s infrastructure sharing regime would harm foreign telecom companies, discourage transition of newer technologies and do little to advance truly free and open trade in telecom services worldwide. Market access talks should focus on removing barriers to direct foreign investment and business ownership, study said: “The U.S. regulatory model should be reconsidered at home, not imposed abroad.” USTR wasn’t available for response.
Fourteen key trading partners don’t comply with World Trade Organization (WTO) requirements, CompTel said in comments (CD Jan 6 p7) filed with U.S. Trade Representative (USTR). It said Australia, Brazil, China, France, Germany, India, Italy, Japan, Mexico, the Netherlands, Singapore, S. Africa, Switzerland and Taiwan weren’t meeting market-opening requirements under WTO trade agreements. It also put 4 other countries -- Belgium, Ireland, Sweden and Spain -- on “watch list.” CompTel said Chinese telecom regulator Ministry of Information Industry (MII) had precluded growth of competitive market by applying “very narrow” interpretation of value-added services. AS result, it said, few foreign entrants had applied for licenses and none had been approved. CompTel said U.S. govt. should work with China to ensure that it established regulatory body that was separate from any basic telecom supplier. It said that task could be difficult because Chinese govt. owned and controlled all major operators in telecom industry. Japan also has “work to do” to effectively regulate Nippon Telegraph & Telephone (NTT) as dominant carrier, CompTel said. It said Japan should remove “burdensome” regulation on nondominant emerging carriers, reduce excessive fixed-to-mobile rates, create independent regulator. CompTel expressed concerns about “unnecessary” and “burdensome” distinction between licenses that it said “hinder the ability of new entrants to roll out networks quickly and cost-effectively.” It also said Japanese high fixed-to-mobile termination rates could have “significant” economic effect as more telephone calls from U.S. terminated on Japanese cellular network. Mexico hasn’t made much progress toward meeting its WTO commitments, CompTel said. It said Mexico continued to maintain barriers protecting its high international settlement rates by prohibiting alternative commercial arrangements and setting its rate well above industry norm. CompTel said Mexican regulators hadn’t issued new dominant carrier rules to prevent Telmex from engaging in anticompetitive actions. Mexico also prohibits foreign control of carriers authorized to own basic telecom facilities, violating its WTO obligations, CompTel said. France is violating Sec. 5 of Reference Paper, which requires that regulatory body be separate from and not accountable to any supplier of basic telecom services, CompTel said. It said it also was concerned about pricing and provisioning of local access leased lines in France. France Telecom (FT) refused to introduce interconnection leased lines and degraded quality of service commitments in its leased line contracts with new entrants, CompTel said. It said it was concerned that FT was giving “preferential treatment” to its retail arm for premium services. Finally, CompTel said, French govt.’s decision to provide 9 billion euro loan to FT “may violate the national treatment obligation under GATS.”
China and some Latin American countries don’t comply with WTO requirements, AT&T said in comments filed with U.S. Trade Representative (USTR). AT&T said China failed to realize its potential as competitive market due to its “overly narrow” interpretation of market access opportunities to foreign carriers and lack of independent regulator. It said market entry in China was delayed by “extremely narrow” views of Ministry of Information Industry’s (MII) on what constituted value-added service for purpose of international value-added network service licensing. It said definition of foreign investors in China was “much more narrow” than list of value-added services in China’s own Telecom Regulation that applied to domestic-owned operators. “Without a change in MII interpretation, the net effect of current licensing criteria is to define foreign-invested value-added service operators out of competition,” AT&T said. It also said Chinese govt.’s top priority should be to finalize and adopt pending Telecom Law that would establish regulatory body, organizationally separate from govt. agencies “that are focused on developing the state-owned telecommunications industry.” AT&T said regulatory environment in China was discouraging carriers from entering market: “This will continue until foreign investor have a basis for confidence that China has a clear intention and a demonstrated plan to implement its WTO commitments.” AT&T said telecom market in Mexico also was harmed by “many barriers” to telecom competition. It said although Mexico acknowledged importance of open markets by making WTO commitments, it failed to implement them. It said Mexico failed to ensure availability of cost-oriented interconnection arrangements with its major supplier Telmex or to prevent anticompetitive practices by Telmex. AT&T said Mexico should eliminate its prohibition on foreign control of Mexican carriers authorized to own and operate basic telecom facilities. It expressed concern about termination rates in Argentina that it said, “greatly exceed” cost-oriented levels. AT&T said Telecom Argentina and Telefonica de Argentina notified correspondents last year that after Jan. 1 they would apply increased rate of $0.18 per min. for international calls terminating on mobile networks, which would be more than 100% increase over previous mobile termination rates. However, AT&T said, carriers proposed to continue to charge “much lower” rates for domestic-originated calls terminating on mobile networks. Verizon didn’t file comments, but its spokeswoman said it was concerned about Mexico compliance with telecom trade agreements. She said Verizon was “optimistic” about recent actions of Mexican Parliament on telecom issues and would be working with country to solve problems.
China used regulatory authority “to disadvantage foreign [telecom] firms during 2002,” U.S. Trade Representative (USTR) said in its report on China’s 2002 WTO compliance. It said Chinese telecom regulator MII “arbitrarily” raised settlement rates for international calls terminating in China, “which had the effect of artificially boosting the revenues of Chinese telecommunications operators at the expense of foreign firms.”
Office of U.S. Trade Representative (USTR) asked for comments on: (1) Operation and effectiveness, implementation and compliance with World Trade Organization (WTO) Basic Telecom Agreement. (2) Other WTO agreements affecting market opportunities for telecom products and services of U.S. (3) Telecom provisions of N. American Free Trade Agreement (NAFTA). (4) Other telecom trade agreements with Asia Pacific Economic Coop. (APEC) members, European Union, Inter- American Telecom Commission (CITEL), Japan, Korea, Mexico, Taiwan. USTR said it would conclude review by March 31. Comments are due Jan. 3, replies Jan. 24.
FCC International Bureau Chief Donald Abelson expressed concerns about Chinese govt.’s raising settlement rates for international calls. “This is just another vain attempt at stopping what will be inevitable -- that is, the cost of connectivity should go down,” Abelson said at news conference Fri. Noting progressive stance that China had taken in past on IP telephony, he said that was “exactly the kind of policy I thought that we were going to see from China going on in the future. This particular action… I am surprised by it.”
Commerce Dept.’s Bureau of Industry & Security (BIS) vowed to crack down on violators of U.S. antiboycott regulations, following last week’s pledge by Arab League’s Boycott Office to reactivate its ban on trade with Israel. Commerce Undersecy. for Industry & Security Kenneth Juster issued reminder Mon. that U.S. businesses and citizens were prohibited from participating in unsanctioned govt. boycotts. He said BIS, formerly known as Bureau of Export Administration, had long history of enforcing antiboycott rules and had levied tens of millions of dollars in civil penalties on and denied export privileges to violators.
Office of U.S. Trade Representative (USTR) presented Japanese govt. with report offering recommendations in wide range of policy areas, including wireless communications, wireless services, broadband deployment, e-commerce, intellectual property protection and privacy protection. “Annual Reform Recommendations from the Government of the United States to the Government of Japan Under the U.S.-Japan Regulatory Reform and Competition Policy Initiative” said its recommendations were “designed to facilitate a return to sustainable growth and open market in Japan.” Report said Japan had made “significant” progress in promoting competition in telecom sector through regulatory reform, as well as in rollout of advanced telecom technologies, including deployment of broadband services. U.S. also urged Japan to consider “even more far-reaching reforms that challenge the status quo, facilitating a transition to advanced networks and services, and allowing market forces to overtake obsolete regulations that hinder the development of a competitive environment.” U.S. suggested U.S.-Japan Telecom Working Group enhance its dialog by inviting experts from govt. and private sector to provide their perspectives. It also recommended Japan implement following reforms in telecom sector in 2003: (1) Focus regulatory obligations on carriers with market power and eliminate or reduce filing and reporting requirements for carriers without market power. (2) Promote transparent and independent regulation by transferring regulatory functions to independent agency not under ministerial authority. (3) Reinforce dominant carrier safeguards to prevent abuses by carriers with market power. (4) Complete implementation of cost-oriented, transparent and reasonable interconnection rates that are necessary for competitive local market and ensure that interconnection will be available to competitors on non-discriminatory terms. (5) Establish means to determine if rates for termination to NTT DoCoMo network are set at reasonable, competitive levels and eliminate discrimination in retail rate-setting. (6) Continue to improve rights of way regime through annual reviews of rights of way guidelines to promote competitors’ installation of network facilities.